Construction activity is carried out by both private and public sectors. In 2008-09 the value of construction work done (in volume terms) for the public sector was $34b (graph 21.3). Private sector construction can be volatile. It experienced a sharp decline in 2000-01. Between 2007-08 and 2008-09 private sector construction (in volume terms) increased by 6% to $107b.

21.3 construction work done(a), By sector

In the three broad areas of construction activity - residential building, non-residential building, and engineering construction - the pattern of construction activity by area of activity has changed significantly over time.

Residential building activity which accelerated to a high level prior to the introduction of The New Tax System in July 2000, was followed by a substantial downturn in 2000-01 (graph 21.4). In 2005-06 engineering construction activity surpassed residential building in value, and reached $70b in 2008-09.

21.4 Value of work done(a), By type of activity(b)

Residential building

Residential building involves the construction of dwelling units, including new houses, other new residential buildings (flats, apartments, villa units, townhouses, duplexes, etc.), and dwellings created as part of alterations and additions to existing buildings (including conversions to dwelling units).

Residential building approvals

Building approvals are used as a key indicator of future activity, as nearly all building activity must be approved by local and/or other authorities.

Graph 21.5 shows new houses and new other residential dwelling unit approvals. In 2008-09 the total number of dwelling unit approvals was 132,568, a fall of 30,164 dwelling units (19%) compared with 2007-08. Between 2007-08 and 2008-09 the number of new house approvals fell by 14%, while new other residential dwelling unit approvals fell by 27%.

Other residential building refers to a building other than a house primarily used for long-term residential purposes and which contains (or has attached to it) more than one dwelling unit. This includes buildings such as blocks of flats, units and apartments, and semi-detached houses and townhouses.

In 2008-09 the number of new dwelling units approved in new residential buildings for new flats, units and apartments fell by 30%, from 29,155 in 2007-08, to 20,433 (table 21.6).

In 2008-09 new semi-detached, row or terrace houses and townhouses approvals for two or more storeys fell by 26%, while approvals for one storey dwellings fell by 22%. For new flat, unit or apartment building approvals, those with four or more storeys fell by 31%, while those in a building of three storeys fell by 30%, and those of one or two storeys fell by 22%. Approvals for new flats, units or apartments accounted for 54% of total new other residential building approvals in 2008-09.

New residential building work done

Between 2007-08 and 2008-09 the value of total building work done increased by $2,953m (4%) to $78,213m (table 21.7). Total new residential building increased from $36,464m to $37,682m, with new residential building for houses rising by $245m or just under 1%.

Non-residential building

The value of non-residential building work approved in 2008-09 fell 19% to $30,113m (table 21.8). Between 2007-08 and 2008-09 the type of non-residential buildings which experienced the largest relative increase in approvals was educational buildings (53%). Those that experienced a significant fall in approvals included accommodation (42%), warehouses (41%), offices (40%), non-aged care medical services health facilities (39%), aged care facilities (29%), retail and wholesale trade buildings (25%) and transport buildings (24%).

The total value of non-residential building work done rose 5% to $33,739m in 2008-09. The largest percentage increases in value of non-residential work done were experienced by agricultural and aquacultural buildings (56%), other commercial buildings n.e.c. (33%) and non-aged care medical services health facilities (24%). A fall in work done for non-residential building work occurred for warehouses (16%), religious buildings (9%), and aged care facilities and retail and wholesale trade buildings (both falling by 3%).

Engineering construction

The total value of engineering construction work done by the private sector for the private sector and for the public sector, between 1998-99 and 2008-09, is shown in graph 21.9. The value of both private and public sector engineering construction work done (in volume terms) increased over the last year. Since around 2001-02 the value of engineering construction work done by the private sector has increased substantially and has been of greater value than work done for the public sector.

21.9 engineering construction work done, By sector(a)(b)

Table 21.10 shows the contribution of public and private sectors to engineering construction work done (in current prices). The private sector share of the total construction work done was 64% in 2007-08 and 63% in 2008-09.

Engineering construction for oil, gas, coal and other minerals mining accounted for 32% of the total value of engineering construction work done in 2008-09 (30% in 2007-08), with total value for this construction increasing 34% between 2007-08 and 2008-09. The value of private sector construction activity for oil, gas, coal and other minerals increased 33% between 2007-08 and 2008-09 (from $18,228m to $24,330m). The private sector share of railways construction work fell from 52% in 2007-08 to 36% in 2008-09, while its share of roads, highways of construction work and subdivisions fell from 41% to 38% over the same period. The value of total pipelines construction increased by 35% between 2007-08 and 2008-09, total electricity generation, transmission and distribution construction increased by 33%. For the same periods, the value of telecommunications engineering construction work fell by 10% while water storage and supply engineering construction work fell by 3%.

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